Monday, February 21, 2011

Swan to banks - Your super profits are safe

Australian banks are in the clear. Treasurer Wayne Swan says they will escape both a mining-style super profits tax and a special bank transactions tax.

Speaking from the G-20 Finance Ministers meeting in Paris where the idea of a transactions tax was "floated and discussed" Mr Swan said it would not be applied down under.

"Our position is very clear. We are not looking at any such tax in the banking system," he told Network Ten. "There is a world of difference between the banking system and mining. Mining uses the resources owned by the Australian people for which a fair fee or royalty or rent should be paid. That is why we have put in place our resource rent tax. We are not moving in that direction in the banking system."

"Joe Hockey thinks the miners have been paying too much tax and that’s why he is opposing our mineral resources rent tax. He is opposing the tax in circumstances where the miners are making record profits."

"When it comes to a bank transaction tax, that was floated and discussed in the G20, but there is no action flowing from that"...

The Treasurer's reassurance comes just days after ANZ chief executive Mike Smith cautioned against the temptation for governments to pursue "populist" policies against business.

A string of bumper profit results handed down by banks over recent weeks has stoked calls for Canberra to revisit banking super-profits tax.

"Australia cannot afford to frighten off foreign investors by giving oxygen to populist policy proposals," Mr Smith told an analyst briefing.

"Without these investors, whether they're investing in our growth sectors such as resources or by funding the balance sheet of banks, growth in Australia will stall and unemployment will rise."

The Australian Bankers Association has said there is "no evidence" that banks are making excessive profits.

Published in today's SMH and Age

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